Policy group backs Senate’s P0.10/kg coal tax hike proposal for TRAIN

Posted on Dec 5th, 2017

MANILA, 5 December 2017 – The Institute for Climate and Sustainable Cities (ICSC) today called on Congress to adopt the former’s proposed coal tax hike of P0.10 per kilogram in the bicameral conference committee for the tax reform bill.

The Senate and House of Representatives are expected to tackle today the increase in the excise tax on coal, which for 40 years has been pegged at P0.01/kg. The Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill calls for the tax to gradually increase to P0.10/kg in 2018, P0.20/kg in 2019, and P0.30/kg in 2020.

However, coal companies have been scrambling to prevent the increase of the coal tax, however small, according to ICSC executive director Red Constantino.

“The coal industry has been getting away with paying just one centavo per kilogram in coal taxes for four decades. For too long, it has forced consumers to shoulder the costs of the dirtiest, unreliable, and increasingly more expensive energy. It is high time to make the industry pay for their pollution and overall unreliability,” Constantino said.

Constantino lauded Senators Ralph Recto, Joel Villanueva, Miguel Zubiri, and Loren Legarda in pushing for the coal tax hike in the Senate. On the other hand, he noted, the House version does not have a provision on the coal tax in its own TRAIN bill.

“The proposed coal tax increase would fund badly-needed investments in infrastructure and social programs, with the capacity to generate over P3.6 billion in excise tax by next year alone. Consumers would also have everything to gain from the market opening up to cheaper options than coal, such as solar and geothermal energy.” Constantino said.

“We are glad that the Senate has been championing the coal tax hike in the bicameral conference committee, and are hopeful this measure will also enjoy the support of the House,” he added.

A recent report by Lazard, a global financial advisory and asset management firm, shows that it is more expensive to operate coal and oil plants in developing countries like the Philippines than developed countries.

ICSC and the US-based think tank Institute for Energy Economics and Financial Analysis also released a report last October showing how the volatility of coal import prices and the dropping costs of renewable energy would cause over P1 trillion of coal plant assets in the country to be stranded. The study noted that coal prices rose by 60% last year alone.

Meanwhile, about P15 billion in new solar and hydro power projects registered with the Bureau of Investments last October alone, according to the Philippine News Agency.